No one realizes how important credit is until they need it. You spend frivolously without worrying about the consequences. Then, you try to get a credit card, apartment, loan, or car and find out just how important your credit status really is. Your maxed-out credit cards, past due bills, and long overdue student loans come back to haunt you in the worst way. It makes everything more difficult to accomplish and certainly more expensive. What in the world can you do about it?
You could, just ignore it and keep getting rejected or paying higher expenses for products and services you need. OR, you could take the necessary steps to begin fixing your credit. Obviously, if you’re dealing with an immediate emergency then trying to fix your credit won’t help. Fortunately, there are sites like MaxLend.com you can visit to get a loan despite your credit history. Just be sure to repay it in a timely fashion.
Now, that that’s out of the way, here’s a look at steps you should take to fix your bad credit:
Stop Using Credit
If you presently have credit cards. Stop using them until you’ve paid the balances back down to under 30% of the card’s limit. Continuing to use the card when you’re near the max and not making timely payments will only ruin your credit further.
Make Timely Payments
Speaking of timely payments. It’s time you start making your payments on time – particularly those listed on your credit report. Being late to pay a credit card statement, loan, or other financial accounts only ruins your history – even if it’s just a day or two late. Find out what the due dates are for these accounts and set reminders or set up automatic debits with the service providers so the amount due is automatically debited from your account on the correct day.
Pay Down Debt
Your debt to income ratio is an imperative factor that service providers and lenders look at. If you want to buy a house but your debt far outweighs your income, it wouldn’t be wise for the bank to give you a loan. So, to change that, you need to get those debts paid down. Buckle down at home on the spending and put every extra cent towards your debts. You can also get a side gig like blogging, answering surveys, or mystery shopping to get the debts paid down faster.
Talk to Creditors
You might be avoiding all those collection calls you get each day but picking up the phone may be the right answer. Debt collectors are humans too and understand that sometimes things happen that prevent you from being able to pay as you once promised to. They are also often willing to work out arrangements with you to get the debt paid off faster. This could include reducing interest on a credit card, removing late fees and penalties, or coming up with a settlement amount.
Clean Up Your History
Get a copy of all three of your credit reports and read them thoroughly. Is there information present that you believe isn’t true or is so outdated it should be removed? This happens to people all the time, however, it can easily be fixed. All you have to do is write the credit bureau and explain your side of the story and provide any proof you can. For instance, if a 5 -year old cable bill is still on your account but you paid it, write them and provide a receipt. They will contact the collection agency and have them update their accounts to say paid instead of delinquent which will boost your credit scores.
Credit really is king. Without it, obtaining things you want and need (unless you have the funds upfront) will also be more challenging and expensive. If you’ve just learned that your credit history is negative, its not too late to turn things around. Develop a plan of action and begin taking steps towards improving your credit history.